Investing.com -- Shares in Electrolux surged as much as 11.5% to a near two-month intraday high of 29 Swedish crowns before paring gains to trade up 1.3% on Friday, after underlying third-quarter profit beat expectations, helping investors look past a surprise net loss and a downgraded full-year outlook.
Operating income excluding non-recurring items rose to 912 million crowns from 890 million a year earlier, beating the consensus forecast of 867 million crowns. Net sales of 33.92 billion crowns also exceeded the 33.49 billion forecast.
The appliance maker posted a net loss of 340 million Swedish crowns, against analyst expectations for a profit of 63.6 million crowns. Loss per share was 0.46 crowns, compared with a forecast profit of 0.08 crowns.
Operating income was 607 million crowns, above the 542 million expected. However, net financial costs of 399 million crowns and income taxes of 548 million crowns on pre-tax profit of 208 million crowns resulted in a net loss. The company said the higher tax charge mainly reflected a timing effect of tax provisions.
Negative non-recurring items totalled 305 million crowns, including 154 million related to the Midea Group partnership in North America and 151 million related to the closure of a factory in Rosario, Argentina.
Higher raw material and logistics costs linked to the Middle East conflict, along with U.S. tariffs, weighed on earnings, partly offset by 1.4 billion crowns in cost-efficiency gains.
Electrolux cut its full-year outlook for the combined contribution from volume, price and mix to neutral from positive. It raised its cost-efficiency expectation to about 4 billion crowns from 3.5 billion-4 billion crowns and maintained its outlook for external factors at "significantly negative".
Operating cash flow after investments rose to 3.61 billion crowns from 624 million crowns a year earlier, helped by working capital and roughly 1 billion crowns in U.S. tariff refunds. Net debt to EBITDA fell to 2.2 times from 3.5 times.
"The key milestones achieved this quarter increase momentum behind our transformation," CEO Yannick Fierling said in the report.
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